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Blog Covid
May 15, 2020
3 min read
Last update: Jul 14, 2023

7 Budget Tips for Cash-Strapped Businesses

For cash-strapped businesses struggling to survive the coronavirus pandemic, cost cutting is a necessary strategy. Here are 5 tips to help you manage your budget while your business is closed or operating at decreased capacity.

Reduce Expenses

Take a long, hard look at where your business is spending money right now. Your immediate, most important expenses should obviously be paid first, but do you have any expenses that are avoidable? With offices being closed, you can save money by pausing copy machine and printer leases, as well as recurring orders for office supplies, snacks, water, and mailing supplies. You may also want to cancel unnecessary subscriptions or services that you can do without for the time being.

Defer Payments

Can you defer any bills for a few months? Contact your landlord, utility companies, bank, and vendors to see if they are offering deferments for businesses impacted by COVID-19. Many credit card companies are offering relief for cardholders who are experiencing financial hardship. It can’t hurt to call your credit card issuer to see if they will grant your request.

Assess Your Staffing Situation

During this unprecedented time, you may be forced to make some reductions to your workforce. While the situation is bleak now, remember that it is also temporary. When things return to normal, you’ll need quality employees on hand. If you need to free up some cash, consider opting for furloughing your personnel instead of laying them off completely. This option helps them retain their benefits while you retain your best employees.

Consider Financial Assistance Programs

There are several funding options available to businesses and nonprofits impacted by COVID-19 such as the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL). These programs are part of the CARES Act which was designed to alleviate the economic downturn of the coronavirus pandemic. Businesses who qualify should apply for assistance as soon as possible to ensure they receive funds while they are still available.

Create a Plan for Your Financial Future

If there’s one thing the COVID-19 crisis has taught businesses, it’s that unexpected circumstances that disrupt operations can occur at any time. Having a plan in place going forward will help you survive an unforeseen emergency, pandemic, or natural disaster. Cash flow is one of the biggest challenges to a business even under normal circumstances. Successful businesses make sure they have the capital to withstand unexpected situations.

Remember that this isn’t forever and business as usual will return again. That’s why it is crucial to secure the capital you need now to get back on track when everything returns to normal.

If you are in need of immediate financial assistance for your business to cover payroll, assist with rent, or to help with cash flow due to the current health crisis, please contact us today at (844) 284-2725.

Negotiate with Suppliers and Vendors

One of the best ways to reduce expenses is by negotiating better terms with your suppliers and vendors. Reach out to your suppliers and discuss the possibility of receiving discounts, extended payment terms, or other cost-saving measures.

Suppliers often appreciate their long-term customers and may be willing to work with you to find a mutually beneficial solution during difficult times.

Reevaluate Your Marketing Strategy

Marketing is essential for businesses, but it can also be expensive. Reassess your current marketing strategy and focus on cost-effective methods that provide a high return on investment.

Utilize social media platforms, email marketing, SEO and content marketing to engage with your audience and promote your products or services more efficiently.

These digital channels can be highly effective in driving traffic and generating leads while keeping costs down.

FAQ

How can I create a financial plan for future emergencies?

Develop a financial contingency plan that includes strategies for managing cash flow, securing capital, and handling unexpected situations such as emergencies, pandemics, or natural disasters. This will help your business be more resilient and better prepared for future challenges.

How can I negotiate better terms with suppliers and vendors?

Contact your suppliers and vendors to discuss the possibility of receiving discounts, extended payment terms, or other cost-saving measures during difficult times. Open communication and a willingness to find mutually beneficial solutions can lead to better terms and conditions.

How can I efficiently manage and pay off my business debt during a financial crisis?

When facing financial difficulties, it’s essential to prioritize and efficiently manage your business debt to prevent further strain on your resources. For example you can choose popular debt repayment methods and pick Debt Snowball or Debt Avalanche method. By understanding the differences between these two approaches, you can choose the strategy that best suits your business needs and financial goals.

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